ZOZO, Inc.

Business Details

ZOZO, Inc. operates a single EC business segment centered on "ZOZOTOWN" and "WEAR by ZOZO," comprising business categories such as consignment sales, buyback sales, USED sales, LINE Yahoo Commerce, BtoB, and advertising. In April 2025, the company made LYST LTD, operator of the global fashion platform "Lyst," a wholly owned subsidiary, formally launching overseas expansion. Backed by resilient domestic fashion consumption, the company pursues growth centered on expanding unique users and improving conversion rates.

Recent Overview

Full-year net sales fell short of plan, but all profit items exceeded plan; Lyst struggled in its first year

For the full fiscal year ended March 2026, merchandise transaction volume was ¥666,035 million (up 8.4% year on year), net sales were ¥228,373 million (up 7.2%), and operating income was ¥69,366 million (up 7.1%). Net sales fell 1.4% short of the earnings forecast (mainly due to Lyst underperformance and weather impact), while operating income exceeded the forecast by over 0.2%. Goodwill amortization rose sharply to ¥2,294 million (from ¥251 million in the prior period) due to Lyst consolidation. An extraordinary loss of ¥727 million was recorded in connection with the termination of the MS and other manufacturing businesses. As a subsequent event, the company acquired High Link, Inc. (operator of the fragrance platform "Karariа") as a wholly owned subsidiary for an estimated acquisition cost of ¥4,990 million (shares acquired on April 16, 2026). For FY2027 (ending March 2027), the company forecasts net sales of ¥241,900 million (up 5.9%) and operating income of ¥74,400 million (up 7.3%), with a medium-term target of adjusted EBITA of ¥90.0 billion for FY2030 (ending March 2030).

Key Products

Growth Drivers

• Continued expansion of active members (12,479,312 at period end, up 1,075,921 year on year) and stronger acquisition of new members through web advertising and referral campaigns
• Continued high growth of LINE Yahoo Commerce (merchandise transaction volume up 13.4% year on year to ¥78,926 million)
• Maximizing customer traffic through a combination of sales events such as ZOZOWEEK, Black Friday, and main sales with TV commercials and web advertising
• Reduced shipping cost ratio (down 0.6 points relative to merchandise transaction volume) through improved economic terms with delivery contractors (from October 2025)
• Strengthening the cosmetics category centered on ZOZOCOSME and attracting new brands (11,247 brands at period end, up 2,198 from the prior year end)
• Discontinuous growth in global markets centered on Lyst (merchandise transaction volume of ¥42,245 million captured from its first year of consolidation)
• Business expansion into the Near Fashion domain (fragrance) through the full consolidation of High Link, Inc. (Karariа)
• Enhanced added value through technology-driven "suits you" solutions, including AI agent development
• Reduced logistics-related costs (down 0.5 points relative to merchandise transaction volume) through improved operational efficiency at logistics facilities

Risks

• Decline in gross margin due to Lyst consolidation (the affiliate model's commission rate is lower than consignment sales, causing gross margin to decline 1.5 points year on year to 33.0%)
• Risk of Lyst falling short of plan due to weakness in the Western luxury market and changes to U.S. tariff policy (results again fell short of plan in the current period)
• Risk of reduced demand for seasonal merchandise (autumn/winter items) due to climate change and persistently high temperatures (materialized in Q2 and Q3)
• Decline in annual purchase amount and items purchased due to a rising proportion of new members (down 3.8% and down 2.9% year on year at period end, respectively)
• Sharp increase in goodwill amortization (expanded roughly ninefold to ¥2,294 million for the period from ¥251 million in the prior period, due to Lyst consolidation)
• Contraction of the BtoB business (merchandise transaction volume down 36.1% year on year) and recording of extraordinary losses (¥727 million) associated with the termination of the MS and other manufacturing businesses
• Risk of reduced consumer spending appetite due to persistent price increases, geopolitical risk, and currency fluctuations
• Significant decline in cash balance (from ¥91,486 million to ¥69,422 million) due to share buybacks (¥10,001 million), dividends (¥32,834 million), and the Lyst acquisition (¥21,807 million)
• Expected decline in gross margin in the following fiscal year due to efforts to overhaul the Lyst business model